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Facts
The assessee, a charitable trust, applied for registration under section 80G. The CIT(E) rejected the application because the assessee used the wrong section code while filing Form 10AB, and they failed to provide a regular approval copy instead of a provisional one.
Held
The Tribunal held that the incorrect selection of a section code/clause is not fatal and should not disentitle the assessee from their claim. The CIT(E) was directed to grant an opportunity to the assessee to rectify the application and decide the matter afresh.
Key Issues
Whether the rejection of an application for 80G registration due to using a wrong section code in Form 10AB is sustainable? Whether a provisional approval copy instead of a regular approval copy is fatal to the application?
Sections Cited
80G, 12A, 10AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 04.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 24.04.2024 in Form No. 10AB under clause (ii) of first proviso to sub- section (5) of section 80G of the Income Tax Act, 1961 (the “Act”).
2. The assessee has filed this appeal with a delay of 20 days. The assessee has filed an application for condonation of delay along with a sworn affidavit stating therein the reasons for delay in filing of the appeal. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, condone the said delay and proceed to decide the appeal.
Briefly stated, the facts of the case are that the assessee is a charitable trust registered under Maharashtra Public Trusts Act, 1950 on 22.01.1992. The assessee trust was registered u/s 12A by Commissioner of Income Tax, Pune on 04.01.1994 with effect from 09.04.1992. The assessee sought re- registration under new scheme and was also granted provisional registration on 08.02.2022. On receipt of assessee’s application along with annexures thereto, with a view to verify the genuineness of activities of the assessee and fulfillment of conditions laid down in clauses (i) to (v) of section 80G(5) of the Act, the Ld. CIT(E) issued a notice through ITBA portal on 04.06.2024 which was duly served on the assessee through e-portal and email, requesting the assessee to upload certain other information/clarification viz. self-certified copy of order of regular approval u/s 80G(5) in form No. 10AC, date of such approval, date of expiry of such approval, proof of identity of main trustees/directors, year-wise list of donations received, note on activities carried out along with supporting credible evidence, details of religious objectives, details of expenses on religious objectives, details of income from profits and gains of business, details of provisions of trust deed / MoA for transfer or application of income for any purpose other than charitable purposes etc. in order to ascertain the overall nature of the activities of the assessee. Compliance to the said notice was due by 19.06.2024. On verification of the details/documents submitted by the assessee in response to thereto, the Ld. CIT(E) observed few discrepancies which were communicated to the assessee by issue of another notice on 16.08.2024 served via email/e-portal seeking compliance by 23.08.2024. The said discrepancies are as under: "On verification of records and details furnished by you, it is seen that you have not furnished the copy of regular approval under section 800(5)(vi) of the Income Tax Act, 1961. You have fled application under clause 30 of fest proviso to section 800(5) of the Act. The provisions of sad section are applicable to a trust or institution which is regularly approved under section 800(5)(v) of the Act. As per the provisions of Rule 11AA(2)(e) of the Income Tax Rules, 1962, the copy of existing order granting approval was required to be submitted along with the application itself Therefore, the copy of order of regular approval under section 800(5)(v) of the Act in form No. 10AC issued under the provisions of clause (1) or clause() of first proviso to section 80G(5) of the Act was required to be submitted by you along with the application, itself. You were also specifically requested vide the notice dated 29/05/2024 to furnish copy of such approval. However, it is seen that the copy of such regular approval is neither submitted along with the application nor submitted during the present proceedings til date. The copy of order of approval available on record is a provisional approval under section 80G(5)(v) of the Act and not a regular approval. Further, it is also seen from the records that you have not made any valid application for regular approval under section 80G(5)(vi) of the Act.”
3.1 The assessee failed to provide its response by the due date to the above discrepancy noted by the Ld. CIT(A) who then issued one more notice on 23.09.2024, seeking compliance by 30.09.2024. On assessee’s failure to file its reply once again, the Ld. CIT proceeded to pass the impugned based on the details/documents submitted by the assessee along with its application observing as under: “7. However, on verification of the details / documents submitted by the assessee along with its application, it is seen that the assessee has not furnished the copy of REGULAR APPROVAL in form No. 10AC under section 80G(5)(vi) read with clause (i) or clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 but submitted a copy of PROVISIONAL APPROVAL under section 80G(5)(vi) read with clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961.
8. The present application is filed by the assessee under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961. The provisions of clause (ii) of first proviso to sub-section (5) of section 80G are related to application for renewal of regular approval of a trust or institution which is already having regular approval under section 80G(5)(vi) of the Act and the period of said registration is about to expire.
9. The assessee was specifically requested vide the initial notice to furnish the copy of order of regular approval under section 80G(5)(vi) of the Income Tax Act, 1961. Such copy is actually required to be furnished along with the application itself under the provisions of Rule 11AA(2)(e) of the Income Tax Rules, 1962. However, the assessee has neither submitted the same along with the application nor in response to the notice issued in this regard. Thus the assessee failed to furnish the same. The copy of order submitted by the assessee along with the present application is a copy of provisional approval under section 80G(5)(vi) read with clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 and not a copy of regular approval under section 80G(5)(vi) read with clause (i) or clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961.
The non-submission of copy of order of regular approval under section 80G(5)(vi) of the Income Tax Act, 1961 establishes the fact that the prerequisite for application under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 is not fulfilled in this case. Therefore, prima-facie it appears that the application is not maintainable.
In view of the above, the application filed by the assessee is treated as non- maintainable and hence, 'rejected' for statistical purposes without going into the merits of the case and no adverse inference is drawn against the assessee.”
Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal and all the grounds of appeal relates thereto.
“1. The assessee prays to condone the delay of 90 days in filing the present appeal for the reasons beyond its control. The assessee begs to submit an affidavit at the time of hearing.
On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Exemptions) Pune, is not justified in rejecting the approval on the basis of non-submission of documents like regular approval by the assessee. The application should have been filed u/c (iii) of the proviso to sec 80G(5)(vi) as against inadvertently / by mistake the assessee sought approval u/c (ii) of the proviso to sec 80G(5)(vi). The application for registration u/s 80G(5)(ii) be restored by setting aside his order dt 04/10/2024.
3. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal.”
The Ld. Counsel for the assessee at the outset submitted that the application filed for grant of approval under section 80G of the Act was rejected by the Ld. CIT(E) solely on the ground that the assessee has used wrong section code while e-filing in Form 10AB. The mistake has happened inadvertently by the assessee and the same is not fatal denying the registration of a charitable trust. In support of this proposition, he placed reliance on the decision of Delhi Tribunal in the case of Raj Krishna Jain Charitable Trust (ITA no. 1553/Del/2024) and in the case of Shree Swaminarayan Gadi Trust (2024) 162 taxmann.com 772 (Surat).
5.1 The Ld. AR further relied on the decision of the Pune Bench of the Tribunal in the case of Datar Kulmandal Vs. CIT (ITA No. 1052/PUN/2024) dated 27.02.2025 and in the case of Shree Hari Kirtanottejak Sabha (ITA No. 2649/PUN/2024) dated 28.05.2025 wherein the Tribunal under the similar set of facts has the matter to the file of the Ld. CIT(E) to decide the issue afresh considering the application filed by the assessee as filed under the correct section code. He therefore requested that the order of the Ld. CIT(E) may be set aside with a direction to treat decide the matter afresh after affording an opportunity of hearing to the assessee.
The Ld. DR, on the other hand, supported the order of the Ld. CIT(E).
We have heard the heard the Ld. Representatives of the parties, perused the order of the Ld. CIT(E) and the paper book filed on behalf of the assessee and as well as various judicial precedents relied upon by the Ld. AR. The facts of the case are not in dispute. The Ld. CIT(E) has rejected the assessee’s application on account of selection of wrong section code by the assessee while e-filing Form 10AB. The main grievance of the assessee agitated in this appeal is the selection of wrong section code by the assessee in its application for regular registration other than Clause (ii) of the first proviso to sub-section (5) of section 80G of the Act. We find that this issue is no more res-integra and covered in favour of the assessee by catena of decisions of the various benches of the Tribunal involving similar set of facts as that of the assessee in the present appeal. In our view, wrong selection of section code/clause would not disentitle the assessee to its rightful claim and cannot be treated as fatal to the proceedings initiated after the filing of the application. Support may be drawn from the decision of the Pune Bench of the Tribunal in the case Help For Children In Need Foundation Vs. CIT (Exemption), Pune in dated 09.12.2024 wherein the order of the Ld. CIT(E) has been set aside with a direction to decide the application afresh by treating the same as filed under the correct/desired section. Similar view has been taken by the Pune Tribunal in the case of Kimaya Ashram Charitable Trust (supra).
Respectfully following the decision(s) of the Co-ordinate Bench (supra) and considering the given facts and circumstances in the present case and also that the Ld. CIT(E) has not given any adverse findings on merits of the case, we deem it fit and proper, in the interest of justice, to grant an opportunity to the assessee to substantiate its case before the Ld. CIT(E) by setting aside the matter to the file of Ld. CIT(E). We, therefore, set aside the impugned order of the Ld. CIT(E) who shall give an opportunity to the assessee to file the correct application/ treat the original application as filed under the correct section and then decide the case on merits denovo as per facts and law, after granting one final opportunity of hearing to the assessee. The assessee is also directed to remain vigilant in respect of the notice(s) of hearing issued by Ld. CIT(E) and submit the details/ documents as may be required/called upon by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30th June, 2025.